How Many ISAs Can I Open in a Year?

Individual Savings Accounts (ISAs) represent a key component of the United Kingdom’s personal finance landscape, designed to encourage saving and investing by offering significant tax advantages. These accounts allow individuals to shield their savings from income tax, capital gains tax, and tax on interest. ISAs provide a tax-free wrapper for various types of investments, helping individuals grow their money without the burden of annual tax liabilities on their returns. This tax efficiency makes ISAs a popular choice for those seeking to maximize their financial growth over time.

Opening Rules for ISAs

The rules regarding how many ISAs an individual can open and contribute to in a single tax year have seen recent adjustments. As of April 6, 2024, individuals are generally permitted to open and contribute to multiple ISAs of the same type within the same tax year. This means you could open and pay into more than one Cash ISA or more than one Stocks and Shares ISA with different providers during the 2025/2026 tax year. The key requirement is that you must still adhere to the overarching annual allowance across all your ISA contributions.

There are specific exceptions to this updated rule. For example, you can still only open and pay into one Lifetime ISA (LISA) in any given tax year. Similarly, Junior ISAs (JISAs) also maintain the restriction of one Cash JISA and one Stocks and Shares JISA per child at any one time. This enhanced flexibility for adult ISAs allows savers more choice and the ability to seek out the best rates or investment opportunities from various providers.

Understanding ISA Types

The UK ISA framework encompasses several distinct types, each designed to cater to different savings and investment goals. The main categories include the Cash ISA, which functions much like a traditional savings account but with tax-free interest. The Stocks and Shares ISA allows investments in a broader range of assets like company shares, funds, and bonds.

The Lifetime ISA (LISA) is specifically designed to help individuals aged 18 to 39 save for their first home or for retirement, offering a government bonus on contributions. The Innovative Finance ISA (IFISA) allows individuals to earn tax-free interest from peer-to-peer lending and crowdfunding debentures.

Annual Contribution Limits

Each tax year, which runs from April 6 to April 5 of the following year, every eligible UK adult receives an overall Individual Savings Account allowance. For the 2025/2026 tax year, this annual allowance stands at £20,000.

This £20,000 allowance can be split flexibly across the different types of ISAs, allowing individuals to tailor their savings strategy to their financial objectives. For example, you could allocate £5,000 to a Cash ISA, £11,000 to a Stocks and Shares ISA, and the remaining £4,000 to a Lifetime ISA, fulfilling its specific sub-limit. Any unused allowance from one tax year cannot be carried over to the next; it operates on a “use it or lose it” basis.

Managing ISA Transfers

Transferring funds between Individual Savings Accounts is a common practice that provides flexibility without impacting the annual contribution allowance. You can transfer existing ISA funds from one provider to another, or even between different types of ISAs, such as moving money from a Cash ISA to a Stocks and Shares ISA. This process is distinct from making new contributions and does not consume any of your current year’s £20,000 allowance.

When transferring funds contributed in previous tax years, you can transfer all or part of the money without restriction. However, if you are transferring funds subscribed in the current tax year, the rules previously required that you transfer the entire amount for that specific ISA type if moving it to a new provider. As of April 6, 2024, new regulations now permit partial transfers of current year subscriptions. Initiate a formal ISA transfer with the new provider rather than withdrawing the funds yourself, as direct withdrawals can lead to the loss of the tax-free status and reduce your available allowance for the year.